Town Staff Fails To Include As Directed By Town Council Specific Uses In the $25M Parks and Recreation Bond

Council approves a $25 million parks and recreation bond...

Last week, The Oro Valley Town Council passed a measure to raise $25 million through bonding for parks and recreation improvements. Mayor Winfield framed the discussion of the bond as the culmination of efforts to add long neglected items to the town’s parks and recreation facilities.  After discussion, the measure passed 5-2, Council Members Greene and Solomon dissented.

But projects to be financed are not a "done deal"

Mayor Winfield framed it as a “done deal.” After all, in July, the council approved by a 5-2 vote the specific projects that are to be funded by the bonds. But that does not mean that all of those projects will actually happen.

 

Because the bond agreement does not restrict use of funds to specific projects

The only legal document that survives a change in council is the bond indenture document. That document does not restrict the use of these funds to the July approved specific purposes. The funds will be spent over a three or perhaps a four year period. This term of the current Mayor and three council members next year. There is no guarantee that the items this council approved this past July will survive a newly installed council.

Despite the fact that staff was directed in the July  town to include specific uses with the bond

The minutes of the July 2021 town council meeting reflect exactly how these funds are to be used.  The following motion was passed (5-2): "Motion by Mayor Joseph C. Winfield, seconded by councilmember Josh Nicolson to direct staff to include the following projects and amenities with the Parks and Recreation Bond."  The panel at right lists these. Not including these items specifically in the bond indenture violates this council directive

Thus, the use of these funds can be shifted because the funds are really just a "pool of funds"

The funds, thus, can be shifted to other projects because they projects are not identified specifically in the bond. The only way that the projects this council defined in July can survive a new council is if the  the specific projects are included in the "bond indenture."  That is because the bond indenture is the legal document that has been approved by the IRS and the SEC. It is the document upon which investors rely. It is the use of funds as described in that document to which the Trustee of the funds and the town must abide regardless of what any council wants to do.

In this case, however, there is nothing in the bond legal documents that defines the specific use of the funds.

85% of these funds must be expended within three years... beyond the term of current council

In effect, the bonding is creating a $25M fund that can be used for any future parks and recreation need as long as 85% of the funds are expended within three years. This leaves 2 years of spending beyond the term of the current council majority. 

Most of the projects won't even start for six to nine months.

Funds can not be spent in advance. Thus, it is highly likely that it will take at least a year before major projects building commences simply because of a shortage of contractors and materials for the work. 

Consequently, ample funds will remain in the bond fund well into the term of a new council. Indeed, the use of these funds will be their responsibility.

Tomorrow: 5 Reasons why the projects funded may differ from the originally intended projects if the council bond vote last week stands

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